Why Picking the "Best" Mutual Fund Is the Wrong Goal

Most investors obsess over finding the best mutual fund to invest in. But what if avoiding the worst fund matters far more than picking the absolute best?

In this episode, host Shrey Chandra sits down with Deepak Shenoy (Founder & CEO, Capitalmind Mutual Fund) and Anoop Vijaykumar (Head of Equity & Fund Manager, Capitalmind Mutual Fund) to tackle one of the most searched questions in personal finance: how to pick mutual funds that actually deliver long-term returns — without constantly second-guessing your choices.

Using 10 years of FlexiCap fund data across 18 funds, they reveal why even top-performing funds underperform 30–50% of the time — and why that's completely normal. They also run a "reactive investor" experiment that shows exactly how timing the market destroys returns, and what a disciplined mutual fund portfolio strategy looks like instead.

What you'll learn:
• The core vs. satellite portfolio framework and how to allocate across funds smartly
• Why mutual fund underperformance doesn't always mean you should exit — and when it does
• How fund size and AUM can quietly cap your returns — and the red flags to watch
• Corporate governance issues and fund manager changes as early warning signs
• The hidden tax impact of switching mutual funds that most investors never calculate
• When multi-asset mutual funds make sense as a simplified core holding
• How many mutual funds you should hold — and why more isn't always better
• 3 questions to ask before picking any fund — covering philosophy, size, and hygiene checks

Chapters:
0:00 – Intro
1:50 – Introduction to the topic: What’s the best mutual fund?
2:22 – Anoop begins: How to think about picking a mutual fund
3:26 – Analysis of FlexiCap funds over 10 years (18 funds compared)
5:15 – Avoiding the worst funds vs. picking the best
5:35 – Rolling underperformance data - what it reveals
7:07 – Even good funds underperform 1/3 to 1/2 of the time
8:09 – Should you sell an underperforming fund?
8:28 – The “reactive investor” experiment - timing the market backfires
9:51 – What to do before and after investing in a fund
12:07 – Argument for style diversification across funds
13:50 – Two types of successful investors
15:39 – Do multi-asset funds simplify everything?
17:45 – Deepak joins: How many mutual funds should you hold?
20:00 – Core vs. satellite portfolio framework
24:44 – Multi-asset funds as a core holding
28:45 – Can you predict the worst funds? (Size, AUM issues)
31:35 – Corporate governance & fund manager changes as red flags
33:59 – Tax impact of switching funds - often overlooked
39:41 – Three questions to pick the right fund for you
49:46 – Expense ratios: are they really that important?
55:13 – Final framework: philosophy, size, hygiene checks
59:48 – Closing thoughts

If you've ever wondered why your mutual fund is underperforming or made the common mutual fund mistakes of chasing last year's top fund or switching too frequently — this conversation will reframe how you think about investing entirely.

Whether you're a first-time investor or managing a mature portfolio, this is the clearest framework we've put out on mutual fund selection in India.

📌 Subscribe for more data-driven investing content every week.
🔗 Follow us:
🌐 Website: https://www.capitalmindmf.com
🐦 X (Twitter): https://x.com/CapitalmindMF
📸 Instagram: https://www.instagram.com/capitalmindmf
💼 LinkedIn: https://www.linkedin.com/company/capitalmindmf